Congress Invests in Students, Saves Taxpayers $87 billion

Dear Friends,

I am proud to announce that on September 18th, Congress passed a bill that will have a real and meaningful impact on the education of each and every child in America - from our youngest children, to our college students.  I am sending you this email to let you know what is in this legislation that will be helpful to you and your children.  This bill makes the single largest investment in student aid in American history-- and at no additional cost to taxpayers.

The Student Aid and Fiscal Responsibility Act (SAFRA--H.R. 3221) will expand access to an affordable college education to more Americans, transform early education opportunities, and build a world-class community college system.

The SAFRA reforms will save the taxpayers $87 billion and direct $10 billion back to the Treasury to help reduce costs in other areas of the federal budget.  It offers significant increases to government grant and loan assistance for college tuition. It will keep interest rates low on government-subsidized loans.   It makes substantial investments in early childhood education.  And it expands the Perkins low-cost loan program to every U.S. college, and simplifies the process of applying for student financial aid. 

SAFRA will also change the origination of student loans, so that new loans will be made through the government's Direct Loan program.  This new origination process helps save students and the federal government money.

In the job market today, young people are competing, not just with well trained Americans in highly academic programs; they are competing with professionals from around the world.  Our educational system has to prepare students to lead, not just in Washington or Atlanta, but in Paris, Beijing, Johannesburg or Brasilia. This bill prepares American children to do just that.

      For our youngest children, the bill:

• Create an Early Learning Challenge Fund which would award $1 billion each year in competitive grants for states' birth-to-five early learning programs.
• Provide funds for school modernization, renovations, and repair projects which will create a safer, healthier and environmentally friendly learning environment in our children's schools. Georgia will receive $132.6 million over the next two years for these projects.
• Promote parent and family involvement by developing outreach strategies to parents that will help them promote their children's development.

      For our college students, the bill:

• Does away with the complicated FAFSA financial aid application!  The bill makes it easier for families to apply for financial aid by simplifying the FAFSA form and allowing students and families to apply for aid using the information on their tax returns.

• Increases the Pell Grant scholarship from $5350 to $5,550 in 2010 and to $6,900 by 2019. The increases will also keep up with inflation, so that the Pell Grant continues to offer meaningful help to students.  The bill not only increases the award students are eligible for, but also increases the number of students eligible for an award. In the Fifth District, 18,907 students will be eligible for a Pell Grant award in the 2010-2011 academic year.   Over the next ten years, H.R. 3221 invests more than $1.3 billion in Georgia and $ 88.7 million in the Fifth District through the Pell Grant. 

• Invests $3 billion nationally to bolster college access and completion support programs for students. It will increase funding for the College Access Challenge Grant program, resulting in at least $ 4.7 million a year for the next five years in Georgia, and will also fund innovative programs in states and at institutions that focus on increasing financial literacy and helping retain and graduate students. 

• Strengthens and expands the Perkins Loan program, a campus-based program that provides low-cost federal loans to students, by providing the program with more reliable and stable funding from the federal government and expanding the program to include significantly more college campuses. 

• Keeps interest rates low on need-based - or subsidized - federal student loans by making the interest rates on these loans variable beginning in 2012. These interest rates are currently set to jump from 3.4 percent to 6.8 percent in 2012. In 2008, students in Georgia borrowed 256,687 subsidized student loans.  

• Invests $2.55 billion nationally in Historically Black Colleges and Universities and Minority-Serving Institutions to provide students with the support they need to stay in school and graduate. 

I also offered an amendment to strengthen the bill.  In my discussion with state non-profit agencies, like the Georgia Student Finance Commission, I discovered that without changes, the bill would end the participation of state not-for-profit organizations that have been providing critical loan education programs which show students how to manage debt responsibly.  To continue this important counseling service, I offered an amendment which authorizes the Secretary of Education to contract directly with guaranty agencies to provide counseling services. Thankfully, the amendment was adopted and it clarifies that borrower services, including delinquency prevention, default aversion, and loan counseling, are eligible to be funded through grants provided in this bill. The amendment ensures that Georgia Student Finance Commission and other state not-for-profit guaranty agencies around the county can apply for grant money in the bill.               

This Amendment is important since it helps our young people to fully understand the gravity of their responsibilities as they take on student loans.  Some young people will be in debt for hundreds of thousands of dollars before their education is complete. It is very important that they understand how to manage this debt so that they are freed by the educational opportunity student loans provide and not saddled with debts they can never recover from.  

We must invest in our education system at all times, but especially in times of economic uncertainty, to ensure that our children inherit a healthy and productive economy with viable work opportunities. For too long we have not dedicated the resources which prepare our youth for college, or not had the resources available once they get to college. This bill helps to ensure we put our children on a path to compete in a global marketplace and invest in our nation's future.